POSTED: 28 Aug 2013 5:13 PM | CNA

SINGAPORE

National Development Minister Khaw Boon Wan said the ministry estimates that the enhanced Special CPF Housing Grant would cost the government an additional housing subsidy of at least S$150 million a year.

In his Facebook post, Mr Khaw said this will raise the current housing grants (Additional Housing Grant and Special CPF Housing Grant) for new flats from about S$290 million to cover S$440 million a year.

Mr Khaw said the enhancement is not a trivial policy shift but a significant one made after careful consideration.

On August 27, the National Development Ministry announced the enhanced Special CPF Housing Grant, extending the benefit to four-room flats, and middle-income families earning up to S$6,500.

The Special CPF Housing Grant was previously meant only for two-room, three-room flats and families earning up to S$2,250.

Due to the grants, those who planned to buy flats in the resale market may opt for Build-to-Order (BTO) flats instead but analysts feel the impact will be small.

Chris Koh, director of property firm Chris International, said: “In the resale market, I can’t wait for a flat, I need a flat fast, so this group is always there. In the resale market, you also have options of other grants like the family grant, so that can offset this S$20,000 that is being offered to them. Having said that, having S$20,000 is still better than not having it so one will be very tempted especially now we have it open to (the) middle income.”

Separately, Singapore Permanent Resident (PR) households with no citizen owner will have to wait three years from the date of obtaining PR status before they can buy a resale HDB flat.

This will apply to resale applications received on or after 27 August 2013, 5.30pm.

Previously, they could buy a resale flat once they had their PR status.

“These PRs have options. If I don’t buy a resale flat today, I still have the option of renting a place to wait out that three years before I’m eligible to buy. I have lower-end condos that I can consider,” explained Koh.

These measures, in addition to others rolled out previously, aim to stabilise the HDB resale market.

The number of resale applications registered with HDB has been falling for the past four years.

In the first and second quarter of this year, the number was 9,570. This is a 42 per cent drop from the 16,630 applications in the same period in 2009.

Analysts expect transaction volumes for the next two quarters to continue falling by five to 10 per cent.

– CNA/fa

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